Joseph Bankman and Barbara Fried, parents of Sam Bankman-Fried, are urging a court to dismiss a lawsuit filed by the financially troubled cryptocurrency exchange FTX. The exchange aims to recover funds it claims were unlawfully transferred. In September 2023, FTX initiated legal proceedings, seeking to “recover millions of dollars” from Bankman and Fried. However, less than two months later, their son, Bankman-Fried, was convicted on all seven charges related to defrauding customers and the United States, with sentencing scheduled for March.
FTX Legal Battle to Recover Funds Hits Roadblock as Sam Bankman-Fried’s Parents Request Lawsuit Dismissal
Bankman and Fried, both professors at Stanford Law School, are contending that Bankman had no fiduciary relationship with FTX and did not hold any official position like director, officer, or manager. Their argument, outlined in a court filing on January 15, challenges FTX’s assertion of a breach in the fiduciary duty. Notably, the filing emphasizes that merely claiming the parents “knew or should have known” is insufficient. Instead, it asserts that FTX should present specific evidence demonstrating the parents’ “actual knowledge” of actions leading to a breach of fiduciary duty.
In the original lawsuit filed in September 2023, FTX did not specify the total amount allegedly misappropriated by Bankman and Fried. However, certain details were provided, including Bankman’s annual salary of $200,000 as a senior adviser to the FTX foundation, over $18 million spent on a property in the Bahamas, and $5.5 million in FTX Group donations to Stanford University. The university has committed to returning the donated funds.
Leave a comment